Consider Skipping the “Certified” Option When Serving Pleadings

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When serving pleadings in an adversary proceeding, you may want to skip the certified option and go with regular first-class mail, or do both.

Federal Rule of Bankruptcy Procedure 7004 governs service of process in adversary proceedings.  The statute specifically provides for service by first class mail. And while some courts will also permit service of pleadings by certified mail, other courts forbid the use of certified mail.

A recent decision shows why some judges disfavor the use of certified mail.  In re Ratliff, No. 2:01-BK-21157, 2021 WL 976954, at *1 (Bankr. S.D.W. Va. Mar. 15, 2021) (“Ratliff”).  In Ratliff, the debtors/plaintiffs had served the summons and complaint via certified mail.  After the defendant failed to appear, the debtors/plaintiffs requested, and were granted, a clerk’s entry of default.  The debtors/plaintiffs then moved for default judgment.  However, they did not include any record of receipt of the certified mail with their motion.  Id.

The court ruled that the debtors/plaintiffs’ service via certified mail was improper under Bankruptcy Rule 7004.  Relying on precedent from the Eastern District of Virginia, Chief Bankruptcy Judge B. McKay Mignault found that “[f]irst class mail . . . is not the same as certified mail.  Certified mail imposes additional obligations and the mail may not be received timely by the named recipient.”  Ratliff (quoting In re Sheffer, 440 B.R. 121, 122 (Bankr. E.D. Va. 2009)).  While certified mail tends to reduce later challenges by generating evidence the mail was delivered to the right address, if the recipient is not present when the postal worker arrives, the certified mail may never be delivered.  Id.  Because certified mail is distinct from first class mail, Judge Mignault found that plaintiffs/debtors’ service of process was ineffective under Bankruptcy Rule 7004(b).

The court also considered whether service was proper under state law. Bankruptcy Rule 7004 incorporates Federal Rule of Civil Procedure 4(e)-(j).  Rule 4(e) & (h) provide for service “following state law” procedures.  In Ratliff, West Virginia Rule of Civil Procedure 4 applied and allowed for service by certified mail, but such service “shall not be the basis for the entry of a default or a judgment by default unless the record contains a return receipt showing acceptance by the defendant or a return envelope showing refusal of the registered or certified mail by the defendant.”  As no return receipt was included with the motion for default judgment, service was not effective under the state’s procedure.

Because service had not been properly effectuated under Bankruptcy Rule 7004 (including the state law incorporated therein), Judge Mignault denied the debtors/plaintiffs’ motion for default judgment and ordered the clerk’s entry of default vacated.  Denial was without prejudice, however.  Presumably, the debtors/plaintiffs will try to serve again with regular first-class mail.

Other authorities are split on the issue.  For instance, in In Re Sheffer (quoted above), Judge Robert G. Mayer took a similar approach and denied a motion for default judgment after service was completed via certified mail.  440 B.R. at 122.  Unlike in Ratliff, it was clear the defendants had received the complaint, but it was not clear when.  Though arguably late, the defendants had filed an answer with enough time for the parties to prepare for trial.  Thus, Judge Mayer allowed the case to proceed as scheduled.  Id.

In In re Ted A. Petra Furs, Inc., Judge Conrad Duberstein took the opposite approach.  172 B.R. 170 (Bankr. E.D.N.Y. 1994).  He “conclude[d] that service by certified mail complies with Rule 7004(b).”  Id. at 176.  Judge Duberstein “refuse[d] to penalize Plaintiff for taking this extra step by dismissing these adversary proceedings when the only substantial difference between certified and first class mail is the requirement of a signature indicating successful delivery.”  Id.

In In re Frazier, 394 B.R. 399 (Bankr. E.D. Va. 2008), Judge Mayer addressed the same issue.  In finding service via certified mail ineffective, he observed: “There is nothing prohibiting the simultaneous issuance of two summons at the commencement of the case, one of which may be mailed by first class mail and the other by certified mail.  Service is accomplished by the first class mailing.  Evidence of receipt is accomplished by certified mail.”  Id.

As Judge Mayer suggests, plaintiffs in adversary proceedings should consider transmitting the summons and complaint via first class and certified mail.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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